A. A construction contract may include a provision for the retainage of a portion of payment due. Such retainage is not to exceed five percent (5%) of the amount of the payment due. If a construction contract is subject to a bond pursuant to this title and when the work of the contractor has been determined by the holder to be at least fifty percent (50%) complete, and with respect to the balance of the work to be performed by the contractor, the retainage amount shall be two and one-half percent (2.5%).
B. A subcontract shall include a provision for the retainage of a portion of payment due. Such retainage shall not exceed five percent (5%) of the amount of the payment due. If a construction subcontract is subject to a bond pursuant to this title and when the work of the subcontractor has been determined by the holder to be at least fifty percent (50%) complete, and with respect to the balance of the work to be performed by the subcontractor, the retainage amount shall be two and one-half percent (2.5%).
C. No later than twenty-one (21) calendar days after a certificate of substantial completion is issued for the project or separate usable phase of the project and upon adequate performance of the prime contractor and with approval of any applicable surety, retainage shall be released by the owner to the prime contractor less an amount no greater than one hundred fifty percent (150%) of the estimated costs to correct any incomplete or defective work as identified, itemized, and attached to the certificate of substantial completion. All remaining funds shall be released as each deficiency is satisfactorily completed. The prime contractor shall release within ten (10) calendar days of receipt the share of those funds that have been withheld from other entities. All other entities shall release within seven (7) calendar days of receipt the share of those funds that have been withheld from other entities.
Added by Laws 2004, c. 256, § 6, eff. Nov. 1, 2004. Amended by Laws 2005, c. 92, § 4, eff. Nov. 1, 2005. Renumbered from § 626 of Title 15 by Laws 2005, c. 92, § 6, eff. Nov. 1, 2005. Amended by Laws 2010, c. 207, § 1, emerg. eff. May 5, 2010; Laws 2019, c. 456, § 1, eff. Nov. 1, 2019.